Bankhall is urging firms to identify and review emerging risks within their business in light of the Financial Conduct Authority's (FCA) increasing focus on retail conduct risk - and has launched a tool for advisers to help them.
Conduct risk is viewed by the FCA as any current and emerging risks to consumers as a result of a firm's behaviour.
There are strong links to treating customers fairly (TCF), as both are focused on customer outcomes.
However TCF tends to focus on risks that have been realised - where consumer detriment was already happening.
With retail conduct risk there is a greater emphasis on identifying potential risks that have not yet resulted in poor outcomes, but could do so in the future.
Bankhall's retail conduct risk assessment tool has been designed to help firms identify the main conduct risks in their business.
For any gaps, firms document the actions needed to mitigate the possibility of poor customer outcomes in the future.
This document can then be retained as evidence to the FCA that their firm has considered conduct risk and acted accordingly.
Sesame Bankhall group managing director Stephen Gazard said: "The FCA is sending out a clear message and firms need to ensure they take action to protect themselves and their customers.
"The regulator has always been concerned with how firms conduct their business and in particular the way products are sold. However, with retail conduct risk the FCA's focus has shifted and intensified, becoming more intrusive to ensure that fair outcomes are delivered to customers.
"There is a greater requirement on firms to look at risk from the customer's perspective and ensure that good outcomes are being delivered and evidenced - both now and in the future. It is important that firms factor this in to their strategy as their business model evolves."
To highlight the importance of retail conduct risk, and the practical supporting guidance available to help firms, Bankhall is currently running a series of nationwide workshops where its team of regulatory experts are delivering valuable face to face support to adviser firms.
This includes exploring some of the main risks that exist within a firm's proposition and services, its sales process, its ongoing relationship with customers and its overall governance and culture.
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